To bring into focus the evolving changes in the fiercely competitive post-reforms era, the All India Management Association recently organised a two-day seminar in Delhi on "Attracting and Retaining Talent: A Managerial Conundrum".

It is interesting to note thatcompensation alone does not play a very significant part in retaining talent. Says Yogi Sriram seminar director and general manager, HRD, ABB Ltd, "Compensation is not at all the remedy for retaining people. The compensation bubble has finally burst. You cannot retain people by paying them more. Someone who has made up his mind to leave, will quit irrespective of the level of pay or hikes that he gets."

Adds Dwarka Nath, vice-president, HRD, Smithkline Beecham Healthcare Ltd, "Job titles and money are at most temporary measures. To achieve long term corporate excellence, it is important to enhance the work climate in your organisation." Reveals Manoj Kohli, executive director, Allied Signals India Pvt Ltd says, "Compensation is no more a critical issue as all the medium to large organisations, Indian or MNC, have to offer it within a competitive band of plus-minus 10 per cent to attract as well as to retain people." Similar sentiments were expressed by senior HRD representatives from service, engineering,manufacturing and information technology companies.

Says Sriram, "At ABB, compensation system earlier was aggressive in trying to promote individuals. Almost six years back we decided that we will not differentiate people in a team as far as financial rewards are concerned. Our organisational structure has five layers, and each gets something or nothing. The difference lies in job content and the responsibilities to be shouldered by different people. We have an HR system that promotes teams and non-financial rewards system that pays for knowledge or intellectual effort. So people will talk about knowledge-turns and not inventory-turns." The ABB system of uniform increments has stood the test of time for six years and lays its basis on recognising intellectual effort.

The modern day HRD systems emphasise on understanding the needs of the people and "keeps a finger on the pulse of people," says Anil Sachdev, managing director, Eicher Consultancy Services Ltd, "The most important way to retain people is tocreate an environment where employees can follow dreams. In many organisations the managers do not know their staff. In such a situation it is difficult to imagine how compensation solely can help retain a workforce. The annual performance appraisal is the biggest farce. Unless the employees have a shared vision, nothing will succeed. The companies have a narrow-minded focus on shareholder values and in this they forget the larger interests. It is a must to encourage a dialogue and understand peoples' needs."

Some companies feel that at times it is good that some employees quit. Says H M Jha, vice-president, ITC Hotels Ltd, "Over the years we have come to the conclusion that there will always be predictable amount of departures. We can offer the best work environment, but some people might be tempted to go to the Gulf countries for higher salaries. There is no point retaining them, if they are running only after money. Often departures provide openings for others to move up the ladder. To retain people weprovide adequate growth opportunities, recognise honesty and integrity, go out of the way to do something good and have a very close association as in touch and feel."

ITC Hotels has had a problem of management trainees leaving within five years of joining. Says Jha, "If we are able to retain the trainee for five years, he will definitely stay with us. For this we ensure that a person progresses at a faster pace than his counterpart in the industry."

Piyush Srivastava of NIIT Ltd says it is important to understand the parting triggers. These might be: I have skills that the organisation doesn't use; I am doing the same job for years; my pay cheque.

Says he, "Retention is the art of responding to these signals and the science of managing growth of organisations, with the growth of individuals. Our retention methods include promotions, titles, golden handcuffs (eg house loan), career development opportunities and little gestures. These might take the shape of dating allowance, anniversary allowance,wedding loans, movies, complementary tickets to various events. Beyond the environs of the office we try and participate in the life of our employees."

Creating a healthy environment is a sine qua non for achieving corporate excellence, but HRD professionals agree that often financial rewards are important. In fact, the financial acknowledgments have matured over time and have taken the shape of stock option schemes, performance based loans and golden handcuffs. Though the experts stress that financial rewards in themselves are not enough to meet the objectives of the company.

Whatever be the merits or demerits of an incentive programme to retain people, it is important to note, as pointed out by Tom Peters and Waterman in In Search of Excellence: "Although most managements assert that their companies care for their people, excellent companies are distinguished by the intensity and pervasiveness of this concern."

In the final analysis, an environment devoid of praise, acknowledgements orincentives would foster demotivation among workers. And not surprisingly, these issues are very much in the fore in today's organisations and are among the core strategies for attracting and retaining talent.